Worksport Ltd

Previous wording

The following discussion should be read in conjunction with the Company’s Annual Report Form 10-K for the fiscal year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 27,2025 and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.

Current wording

The following discussion should be read in conjunction with the Company’s Annual Report Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 27, 2025 and the unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.

Previous wording

Worksport Ltd., through its subsidiaries, designs, develops, manufactures, and owns the intellectual property on a variety of tonneau covers, solar integrations, portable power systems, and clean heating & cooling solutions. Additionally, Worksport’s hard-folding cover, designed and manufactured in the United States, is compatible with all major truck models and is gaining traction with newer truck makers including the EV sector. Worksport seeks to capitalize on the growing shift of consumer mindsets towards clean energy integrations and power grid independence with its proprietary solar solutions, mobile energy storage systems (ESS), and Cold-Climate Heat Pump (CCHP) technology.

Current wording

Worksport Ltd., through its subsidiaries, designs, develops, manufactures, and owns the intellectual property on a variety of tonneau covers, solar integrations, portable power systems, and clean heating & cooling solutions. Additionally, Worksport’s hard-folding cover, designed and manufactured in the U.S., is compatible with all major truck models and is gaining traction with newer truck makers including the EV sector. Worksport seeks to capitalize on the growing shift of consumer mindsets towards clean energy integrations and power grid independence with its proprietary solar solutions, mobile energy storage systems (ESS), and Cold-Climate Heat Pump (CCHP) technology.

Previous wording

See Note 1, Description of Business and Significant Accounting Policies included in Item 1, Financial Statements of this report for further information regarding Financial Accounting Standards Board issued Accounting Standards Updates (“ASU”).

Current wording

See Note 1, Description of Business and Significant Accounting Policies included in Item 1, Financial Statements of this report for further information regarding Financial Accounting Standards Board issued Accounting Standards Updates.

Previous wording

For the three months ended June 30, 2025, net sales were $4,104,958, as compared to $1,921,539 for the three months ended June 30, 2024. Year-over-year net sales increased by approximately 114%. For the three months ended June 30, 2025, net sales generated in U.S. was $4,070,406, as compared to $1,910,838 for the same period in 2024, an increase of 113%. For the three months ended June 30, 2025, revenue generated in Canada was $34,552, compared to $28,677 for the same period in 2024, an increase of 20%.

Current wording

For the three months ended September 30, 2025, net sales were $5,013,872, as compared to $3,122,359 for the three months ended September 30, 2024. Year-over-year net sales increased by 61%. For the three months ended September 30, 2025, net sales generated in the U.S. was $4,985,887, as compared to $3,093,608 for the same period in 2024, an increase of 61%. For the three months ended September 30, 2025, net sales generated from other countries was $27,985, compared to $28,751 for the same period in 2024.

Previous wording

Net sales increased during the three months ended June 30, 2025 compared to the same period the prior year due to the successful launch of the AL4 product line alongside further branding and marketing efforts for all product lines, resulting in higher direct to consumer sales. Implementation of our distributor, wholesaler, and jobber sales strategy via the addition of multiple distributor partners with a network of over 550 locations across the United States has driven higher net sales from our business to business sales channels.

Current wording

Net sales increased during the three months ended September 30, 2025 compared to the same period the prior year due to the successful launch of the AL4 product line alongside further branding and marketing efforts for all product lines, resulting in higher direct to consumer sales. Implementation of our distributor, wholesaler, and jobber sales strategy via the addition of multiple distributor partners with a network of over 550 locations across the U.S. has driven higher net sales from our business-to-business sales channels.

Previous wording

We distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private labels, distributors, and other online retailers, including eBay, Amazon, Walmart, and our own e-commerce platform hosted on Shopify. Distribution via each aforementioned channel is expected to increase during 2025. We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well.

Current wording

We distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private labels, distributors, and other online retailers, including eBay, Amazon, and our own e-commerce platform hosted on Shopify. Distribution via each aforementioned channel is expected to increase during 2026. We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well.

Previous wording

We currently work closely with a large Canadian and four large U.S. distributors as well as online retailers to grow our customer base. We are progressing well in conversations with two other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.

Current wording

We currently work closely with six large U.S. distributors, one retail auto chain, and online retailers to grow our customer base. We added two of these U.S. distributors within the period, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.

Previous wording

Cost of sales increased by 86%, from $1,624,910 for the three months ended June 30, 2024, to $3,022,846 for the three months ended June 30, 2025. Our cost of sales, as a percentage of sales, was approximately 73.6% and 84.6% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.

Current wording

Cost of sales increased by 20%, from $2,875,186 for the three months ended September 30, 2024, to $3,445,088 for the three months ended September 30, 2025. Our cost of sales, as a percentage of sales, was 69% and 92% for the three months ended September 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.

Previous wording

We provide our distributors and online retailers an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous United Sates or from the United States to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.

Current wording

We provide our distributors and online retailers an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous U.S. or from the U.S. to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.

Previous wording

Operating expenses increased for the three months ended June 30, 2025 by $492,366, from $4,207,377 for the three months ended June 30, 2024 to $4,699,743, mainly due to the following factors:

Current wording

Operating expenses increased for the three months ended September 30, 2025 by $2,209,166, from $4,152,389 for the three months ended September 30, 2024 to $6,361,555, mainly due to the following factors:

Previous wording

We reported net other expenses for the six months ended June 30, 2025 of $321,012, compared to $177,842 for the six months ended June 30, 2024. The increase in net other expenses was attributed to increased interest expense on our line of credit and a reduction in rental income as a result of the completion of the term of our sublease agreement.

Current wording

We reported net other expenses for the three months ended September 30, 2025 of $135,908, compared to $229,701 for three months ended September 30, 2024. The decrease in net other expenses was attributed to a reduction in interest expense as a result of reduced reliance on our line of credit.

Previous wording

For the six months ended June 30, 2025, net sales were $6,344,963, as compared to $2,434,176 for the six months ended June 30, 2024. Year-over-year net sales increased by approximately 161%. For the six months ended June 30, 2025, net sales generated in U.S. was $6,297,955, as compared to $2,385,492 for the same period in 2024, an increase of 164%. For the six months ended June 30, 2025, revenue generated in Canada was $47,008, compared to $48,684 for the same period in 2024, a decrease of 3%.

Current wording

For the nine months ended September 30, 2025, net sales were $11,358,835, as compared to $5,556,535 for the nine months ended September 30, 2024. Year-over-year net sales increased by 104%. For the nine months ended September 30, 2025, net sales generated in U.S. was $11,284,538, as compared to $5,475,975 for the same period in 2024, an increase of 106%. For the nine months ended September 30, 2025, revenue generated in other countries was $74,297, compared to $80,560 for the same period in 2024, a decrease of 8%.

Previous wording

Net sales increased during the six months ended June 30, 2025 compared to the same period the prior year due to further branding and marketing efforts resulting in higher direct to consumer sales as well as implementation of our distributor, wholesaler, and jobber sales strategy leading to increases in our business to business sales channels. Also driving greater net sales was the release of the flagship AL4 product line.

Current wording

Net sales increased during the nine months ended September 30, 2025 compared to the same period the prior year due to further branding and marketing efforts resulting in higher direct-to-consumer sales as well as implementation of our distributor, wholesaler, and jobber sales strategy leading to increases in our business-to-business sales channels. Also driving greater net sales was the release of the flagship AL4 product line.

Previous wording

We distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private labels, distributors, and other online retailers, including eBay, Amazon, Walmart, and our own e-Commerce platform hosted on Shopify. Distribution via each aforementioned channel is expected to increase during 2025. We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well.

Current wording

We distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private labels, distributors, and other online retailers, including eBay, Amazon, and our own e-Commerce platform hosted on Shopify. Distribution via each aforementioned channel is expected to increase during 2026. We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well.

Previous wording

We currently work closely with a large Canadian and four large U.S. distributors as well as online retailers to grow our customer base. We are progressing well in conversations with two other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.

Current wording

We currently work closely with six large U.S. distributors, one retail auto chain, and online retailers to grow our customer base. We added two of these U.S. distributors within the period, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.

Previous wording

Cost of sales increased by approximately 132%, from $2,100,091 for the six months ended June 30, 2024, to $4,866,630 for the six months ended June 30, 2025. Our cost of sales, as a percentage of sales, was approximately 77% and 86% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.

Current wording

Cost of sales increased by 67%, from $4,975,277 for the nine months ended September 30, 2024, to $8,311,718 for the nine months ended September 30, 2025. Our cost of sales, as a percentage of sales, was 73% and 90% for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.

Previous wording

We provide our distributors and online retailers an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous United Sates or from the United States to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.

Current wording

We provide our distributors and online retailers an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous U.S. or from the U.S. to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.

Previous wording

Operating expenses increased for the six months ended June 30, 2025 by $1,467,970, from $7,884,299 for the six months ended June 30, 2024 to $9,352,269, mainly due to the following factors:

Current wording

Operating expenses increased for the nine months ended September 30, 2025 by $3,693,990, from $12,036,688 for the nine months ended September 30, 2024 to $15,730,678, mainly due to the following factors:

Previous wording

We reported net other expenses for the three months ended June 30, 2025 of $116,853, compared to $102,651 for three months ended June 30, 2024. The increase in net other expenses was attributed to a reduction in rental income as a result of the completion of the term of our sublease agreement.

Current wording

We reported net other expenses for the nine months ended September 30, 2025 of $440,066, compared to $407,543 for the nine months ended September 30, 2024. The increase in net other expenses was attributed to a reduction in rental income as a result of the completion of the term of our sublease agreement.

Previous wording

Net loss for the six months ended June 30, 2025 was $8,194,948, compared to a net loss of $7,728,056 for the six months ended June 30, 2024 – an increase of 6.0%. The increase in the net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations, manufacturing, and supply chain.

Current wording

Net loss for the nine months ended September 30, 2025 was $13,123,627, compared to a net loss of $11,862,973 for the nine months ended September 30, 2024 – an increase of 11%. The increase in the net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations alongside higher marketing expenses to support both ongoing sales volumes and develop future campaigns for which we expect to show return on investment via increased sales in future periods.

Previous wording

As of June 30, 2025 and December 31, 2024, we had $1,393,140 and $4,883,099, respectively in cash and cash equivalents. As of June 30, 2025, we had $4,763,700 of remaining available capacity on our revolving line of credit compared with $811,400 of remaining available capacity as of December 31, 2024. The decrease in cash and cash equivalents and increase in the remaining available capacity on our revolving line of credit was primarily a result of the use of cash flows from operations to reduce our indebtedness. We have historically generated only limited gross profit and have relied primarily upon capital generated from public and private offerings of our securities to fund continuing operations. Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. During the three and six months ended June 30, 2025, we had net losses of $3,734,484 and $8,194,948, respectively (three months ended June 30, 2024 - $4,013,399; six months ended June 30, 2024 - $7,728,056). As of June 30, 2025, the Company had working capital of $4,758,042 (As of December 31, 2024 - $7,304,110) and had an accumulated deficit of $72,671,914 (as of December 31, 2024 - $64,476,966).

Current wording

As of September 30, 2025 and December 31, 2024, we had $3,761,690 and $4,883,099, respectively in cash and cash equivalents. As of September 30, 2025, we had $3,291,250 of remaining available capacity on our revolving line of credit compared with $811,400 of remaining available capacity as of December 31, 2024. The decrease in cash and cash equivalents and increase in the remaining available capacity on our revolving line of credit was primarily a result of the use of cash flows from operations to reduce our indebtedness. We have historically generated only limited gross profit and have relied primarily upon capital generated from public and private offerings of our securities to fund continuing operations. Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. During the three and nine months ended September 30, 2025, we had net losses of $4,928,679 and $13,123,627, respectively (three months ended September 30, 2024 - $4,134,917; nine months ended September 30, 2024 - $11,862,973). As of September 30, 2025, the Company had working capital of $6,311,857 (As of December 31, 2024 - $7,304,110) and had an accumulated deficit of $77,617,726 (as of December 31, 2024 - $64,476,966).

Previous wording

To date, our principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding warrants. During the six months ended June 30, 2025, the Company received net proceeds of $6,384,840 from offerings. Management is focused on transitioning towards gross profit as our principal source of liquidity by growing our existing product offerings and customer base and realizing manufacturing efficiency improvements. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future business developments. Future business development and demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot ensure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, we believe our current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements.

Current wording

To date, our principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding warrants. During the nine months ended September 30, 2025, the Company received net proceeds of $13,358,414 from offerings. Through November 13, 2025, the Company received additional net proceeds of $2,623,212 from offerings. Management is focused on transitioning towards gross profit as our principal source of liquidity by growing our existing product offerings and customer base and realizing manufacturing efficiency improvements. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future business developments. Future business development and demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot ensure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, we believe our current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements.

Previous wording

We have raised significant funds during the six months ended June 30, 2025 per the following public and private offerings:

Current wording

We have raised significant funds during the nine months ended September 30, 2025 per the following public and private offerings:

Previous wording

On February 27, 2025, we entered into a common stock warrant exercise inducement offer letter (the “Inducement Letter”) with a certain holder (the “Holder”) of existing warrants to purchase shares of our common stock at an exercise price of $5.198 per share, issued on May 29, 2024 (the “Existing Warrants”), pursuant to which the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 1,295,000 shares of the Company’s common stock at $5.198 per share, in consideration for the Company’s agreement to issue new warrants (the “Inducement Warrants”) having terms as described below, to purchase up to 1,424,500 shares of the Company’s common stock (the “Inducement Warrant Shares”). We received aggregate gross proceeds of approximately $6,731,400 from the exercise of the Existing Warrants by the Holder and the sale of the Inducement Warrants, before deducting placement agent fees and other offering expenses payable by us. We engaged Maxim Group LLC (“Maxim”) to act as our exclusive financial advisor in connection with the transactions summarized above and will pay Maxim a cash fee from the gross proceeds received from the exercise of the Existing Warrants. Each Inducement Warrant has an exercise price equal to $6.502 per share. The Inducement Warrants are exercisable at any time on or after the date that is six (6) months from the issuance date and will have a term of exercise of five and one half (5½) years following the date of issuance. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, subsequent rights offerings, pro rate distributions, reorganizations, a Fundamental Transaction (as defined in the Inducement Warrants) or similar events affecting our common stock and the exercise price.

Current wording

On February 27, 2025, we entered into a common stock warrant exercise inducement offer letter (the “Inducement Letter”) with a certain holder (the “Holder”) of existing warrants to purchase shares of our common stock at an exercise price of $5.198 per share, issued on May 29, 2024 (the “Existing Warrants”), pursuant to which the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 1,295,000 shares of the Company’s common stock at $5.198 per share, in consideration for the Company’s agreement to issue new warrants (the “Inducement Warrants”) having terms as described below, to purchase up to 1,424,500 shares of the Company’s common stock (the “Inducement Warrant Shares”). We received aggregate gross proceeds of $6,731,410 from the exercise of the Existing Warrants by the Holder and the sale of the Inducement Warrants, before deducting placement agent fees and other offering expenses of $346,570. We engaged Maxim Group LLC (“Maxim”) to act as our exclusive financial advisor in connection with the transactions summarized above and will pay Maxim a cash fee from the gross proceeds received from the exercise of the Existing Warrants. Each Inducement Warrant has an exercise price equal to $6.502 per share. The Inducement Warrants are exercisable at any time on or after the date that is six (6) months from the issuance date and will have a term of exercise of five and one half (5½) years following the date of issuance. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, subsequent rights offerings, pro rate distributions, reorganizations, a Fundamental Transaction (as defined in the Inducement Warrants) or similar events affecting our common stock and the exercise price.

Previous wording

Pursuant to the At The Market Offering Agreement dated as of September 30, 2022 (“ATM Agreement”), with H.C. Wainwright & Co., LLC, as the sales agent, during the six month period ended June 30, 2025, we sold and issued a total of 22,725 shares of common stock in consideration for net proceeds of $185,874 under the ATM Agreement.

Current wording

Pursuant to the ATM Agreement, with H.C. Wainwright & Co., LLC, as the sales agent, during the nine month period ended September 30, 2025, we sold and issued a total of 110,619 shares of common stock in consideration for net proceeds of $504,372 under the ATM Agreement.

Previous wording

On June 13, 2025, Worksport completed the initial closing of its Regulation A offering whereby up to 3,100,000 units may be sold at an offering price of $3.25 per unit. Each unit consists of one share of 8% Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”) and one warrant for the right to purchase one (1) share of common stock, $0.001 par value at an exercise price of $4.50 per share. The qualified Regulation A offering is expected to generate gross proceeds of $10,000,000, and the warrants have the potential to provide an additional $13,950,000 of additional proceeds if all are converted. Through June 30, 2025, the Company completed one tranche and received gross proceeds of $160,339. Subsequent to June 30, the Company completed 12 additional tranches and received gross proceeds of $4,404,146.

Current wording

On June 13, 2025, Worksport completed the initial closing of its Regulation A offering whereby up to 3,100,000 units may be sold at an offering price of $3.25 per unit. Each unit consists of one share of 8% Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”) and one warrant for the right to purchase one (1) share of common stock, $0.001 par value with an exercise price of $4.50 per share. The qualified Regulation A offering is expected to generate gross proceeds of $10,000,000, and the warrants have the potential to provide an additional $13,950,000 of additional proceeds if all are converted. Through September 30, 2025, the Company completed twenty-four tranches and received net proceeds of $6,927,922, including $458,720 of share subscriptions receivable. On October 1, 2025, the Company received the share subscriptions receivable of $458,720. Subsequent to September 30, the Company completed eight additional tranches and received net proceeds of $2,164,492.

Previous wording

Cash decreased from $4,883,099 at December 31, 2024, to $1,393,140 at June 30, 2025 – a decrease of $3,489,959 or 72%. The decrease was primarily due to repayments on debt obligations.

Current wording

Cash decreased from $4,883,099 at December 31, 2024, to $3,761,690 at September 30, 2025 – a decrease of $1,121,409 or 23%. The decrease was primarily due to repayments on debt obligations.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 was $6,935,033, compared to $6,421,292 in 2024, primarily driven by the shift to production and distribution of hard tonneau covers.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $11,190,182, compared to $7,959,212 in 2024, primarily driven by the shift to production and distribution of hard tonneau covers.

Previous wording

Accounts receivable increased at June 30, 2025 by $253,372 and increased by $160,264 in the prior period. The increase in accounts receivable was due to further development of our Distributor and Jobber customer network and relationships.

Current wording

Accounts receivable increased at September 30, 2025 by $472,485 and increased at September 30, 2024 by $3,320. The increase in accounts receivable was due to further development of our business-to-business sales channel, specifically our Distributor and Jobber customer network and relationships.

Previous wording

Inventory increased at June 30, 2025 by $691,459, and decreased at June 30, 2024 by $2,755,252, as a result of the maturation of the production process and shift in 2024 to hard tonneau cover production. Prepaid expenses and deposits increased by $470,641 at June 30, 2025, and decreased by $1,345,434 at June 30, 2024 due to timing of deposits from B2C customers prior to fulfillment of their orders at the end of the accounting period.

Current wording

Inventory increased at September 30, 2025 by $1,645,437, and increased at September 30, 2024 by $2,506,568, as a result of the maturation of the production process and shift in 2024 to hard tonneau cover production.

Previous wording

Accounts payable and accrued liabilities increased at June 30, 2025 by $469,362 compared to an increase of $115,586 at June 30, 2024. The increase is primarily due to an increase in accrued labor costs in 2025 compared with the prior period.

Current wording

Accounts payable and accrued liabilities increased at September 30, 2025 by $1,477,537 compared to an increase of $1,031,400 at September 30, 2024. The increase is primarily due to an increase in raw materials order volume.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $4,027,871 compared to net cash provided by financing activities of $6,817,390 for the six months ended June 30, 2024.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $11,136,030 compared to net cash provided by financing activities of $6,951,879 for the nine months ended September 30, 2024. The increase in financing activities was primarily attributable to net proceeds from offerings offset by net payments on our line of credit.